Gov’t, banks launch petrochemical restructuring drive amid oversupply issues
A team of public-private entities have launched a financial assistance package to accelerate the restructuring of the petrochemical sector, in a move to improve national competitiveness amid a global supply glut, market watchers said Tuesday. Central to the coordinated efforts are attempts to salvage viable firms before they default, preventing systemic spillover into the chemical industry and the broader financial sectors. The once-booming manufacturing industry was one of the country’s key growth drivers, but is now undergoing seismic challenges due to the global drive towards carbon-neutrality and loss of competitive edge due to cheaper goods from China. There is considerable skepticism, however, since the industry has yet to come up with measures to reduce carbon emissions. Banks remain concerned about their deteriorating asset quality, brought on by the expanded financial assistance, a cause for regulatory penalties. Financial regulators say the regulatory standards will be eased accordingly. According to the Financial Services Commission (FSC), 17 banks and four state-run entities
